S&P downgrades EDG Energy

Standard & Poor’s said it revised the outlook on Electricite de France SA to negative from stable.

The agency also said it affirmed the company’s A+ long-term and A-1 short-term corporate credit ratings.

S&P also said it lowered the long-term corporate credit ratings on subsidiaries EDF Energy plc and EDF Energy Customers plc to A- from A and affirmed the A-1 short-term corporate credit rating on EDF Energy.

The agency also said it lowered the long-term counterparty credit and financial strength ratings on EDF’s captive insurance subsidiary, Wagram Insurance Co. Ltd., toA- from A.

The outlooks on these three entities are negative.

S&P also said it lowered the rating on the junior subordinated hybrid securities issued by EDF to BBB from BBB+.

The downgrades reflect a view that France’s rapidly changing regulatory and competitive landscape will have a negative impact on the group’s strong market positions and defensive profile, the agency said.

The company will now operate in a new paradigm, with significantly increased exposure to unregulated power activities, the agency said.

But, there continues to be a high likelihood the French government would provide extraordinary timely and sufficient support to EDF in the event of financial stress, S&P said.

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